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Liz Servañez
Liz Servañez serves as Branch Manager in the Philippines.
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Christine Aguilar
Christine Aguilar serves as Head of Operations in the Philippines.
Historically, foreigners are strictly prohibited from owning land in the Philippines under Article XII, Section 7 of the 1987 Constitution. However, you can own real estate shares through a REIT corporation and collect dividends.
The good thing is: REIT is accessible to everyone so long as you meet the eligible criteria (which we will discuss in this article). Whether you want to diversify your investment portfolio or build your own real estate stock corporation, REITs allow you to own assets in the local economy, and gain passive income.
Our key focus on this article is to shed light on how you can establish your own REIT stock corporation as a foreigner. We will cover key requirements and regulations for setting up this type of stock company in the Philippines
Understanding REIT in the Philippines
A REIT is a stock corporation that owns and operates income-generating real estate. When you buy shares, you aren’t buying a specific building; you are buying into a professionally managed portfolio. It is a “hands-off” investment where developers handle the tenants, maintenance, and leasing while you collect the profits through dividends.
Under the Real Estate Investment Trust (REIT) Act of 2009 (Republic Act No. 9856), REITs are legally mandated to distribute at least 90% of their annual distributable income to shareholders. This makes them one of the most reliable sources of passive income in the Philippine market.
REITs have also become more accessible thanks to the SEC Memorandum Circular No. 1 on January 8, 2026. Beyond traditional real estate such as malls and offices, you can now own REIT shares and set up a REIT company in energy assets (e.g., power plants), data centers, telco towers, toll roads, fiber optic networks, airports, ports, railways, and warehouses. Granted, you are required to produce consistent income from rentals, tolls, fees or similar dividend sources.
Key Benefits of REIT for Foreigners
Investing in REIT in the Philippines offers three distinct financial benefits:
- High-Yield Dividend Income: Unlike standard stocks where dividends are discretionary, REIT investors receive direct, regular cash flow. This provides a steady stream of Philippine Pesos derived from the rent paid by high-quality tenants (e.g. multinational BPOs and major retail chains).
- Capital Appreciation Potential: You can benefit from the rising value of Philippine real estate. Following the country’s economic growth, infrastructure improvements, or rising rental rates, the REIT’s share price typically follows.
- Superior Liquidity and Accessibility: One of the biggest drawbacks of physical real estate is that it is “illiquid”. This means it can take months or even years to find a buyer and complete a sale if you do decide to sell. Because REITs are sold on the Philippine Stock Exchange (PSE), you can enter or exit your position. This gives you the flexibility to rebalance your portfolio or access your capital whenever the need arises.
Who can Invest in REIT Shares?
Any individual of legal age (18+) regardless of nationality is eligible to invest in Philippine REITs. This includes the following individuals:
- Resident Foreigners: Those with a valid ACR I-Card, SRRV (Retirement Visa), or SIRV (Investment Visa).
- Non-Resident Foreigners: Those living outside the Philippines who wish to invest remotely.
- Foreign Corporations: Entities licensed to do business or registered as foreign investors in the Philippines.
For foreigners, you typically need a broker accredited by the Philippine Stock Exchange (PSE) to open an account. Unlike regular stocks, the SEC mandates that REIT shares be held in a Name-on-Central-Depository (NoCD) facility. This means your shares are registered in your specific name rather than your stock broker’s name.
Emerhub can help you connect with our network of REIT brokers in the Philippines. These professionals can help you open a stock trading (brokerage) account and help manage your stocks.
Establishing a REIT Corporation in the Philippines as a Foreigner
While most foreigners participate as investors, some international developers or groups may want to establish a REIT Stock Corporation. This is a far more complex corporate undertaking but not impossible with the right knowledge and network. With our help, we can help you establish your own REIT corporation in the Philippines.
Capitalization & Structure Requirements
While starting a REIT corporation requires serious commitment, entry requirements are well within reach if you’re a mid-sized developer or a niche infrastructure owner looking to scale.
To ensure that your entity remains stable and provide genuine value to the investing public, the government has set the following requirements for entry:
- Minimum Paid-up Capital: A REIT must have a minimum paid-up capital of PHP 300 Million (approx. USD 5.4 Million) at the time of incorporation.
- Property Mix: At least 75% of the REIT’s deposited property must be invested in income-generating real estate. These assets must have a track record of generating rental income for at least three years.
- Listing Requirement: The corporation must be listed on PSE and maintain a minimum of 1,000 public shareholders.
Pro Tip: To benefit from tax incentives, the REIT must maintain a public float of at least 33% of its outstanding capital stock. This ensures that the wealth generated is distributed among a broad base of investors.
The 60/40 Nationality Rule for Land
Foreign ownership on landed property is strictly regulated under the Philippine constitution. If your REIT company intends to own the actual land (freehold), the corporation must be at least 60% Filipino-owned to ensure that locals have a majority of voting control. This ensures that economic interest over national land remains with Philippine nationals. It often necessitates strategic partnerships or joint ventures with established local conglomerates to meet statutory compliance.
Another way the SEC ensures local participation is through a mandated Sponsor Reinvestment Plan. Sponsors who contribute assets to the REIT and receive cash proceeds from the sale of shares are legally required to reinvest those proceeds back into the Philippines within 1-2 years.
This capital must be funneled into new real estate projects, such as residential townships, commercial malls, or industrial warehouses, or into infrastructure and redevelopment projects within the country. This rule effectively forces developers to use the REIT mechanism as a “recycling” tool to build the next generation of Philippine property.
Leasehold alternative: You can still establish a 100% foreign-owned REIT if the portfolio consists strictly of leasehold rights (long-term renting from a Filipino landowner) or buildings without land ownership.
Governance & Management
The SEC requires a specific management structure to protect public shareholders in the Philippines. This framework is designed to prevent conflicts of interest and ensure that the REIT is managed with a “shareholder-first” philosophy.
To establish a REIT corporation in the Philippines, you must appoint these roles within your management team:
- Board of Directors: At least one-third (or a minimum of two directors, whichever is higher) must be independent directors.
- Must not have any relationship (familial or professional) with the REIT’s sponsors or major shareholders.
- Ensures that the board’s decisions regarding property acquisitions or dividend declarations are made fairly and transparently.
- Professional Fund & Property Managers: handles the investment strategy and oversees day-to-day operations.
- Must remain independent of the REIT and its majority sponsors to maintain strict checks and balances.
- Must be registered and licensed by the SEC
Simplifying the Incorporation Process with Emerhub
At Emerhub, we specialize in helping foreign investors navigate the Philippine regulatory landscape. With our experienced local compliance experts, we can help you set up a REIT corporation in the Philippines.
We can help you manage your SEC incorporation (with PHP 300M asset minimum), PSE listing, BIR registration, and obtaining local permits, and compliance structuring to avoid Anti-Dummy Law issues.
Tell us where you want to invest in the Philippines. Talk to our local experts with a free consultation by filling out the form below!
Common FAQs About REIT in the Philippines
As an individual, you can invest freely. The REIT corporation itself ensures it meets the 60/40 Filipino ownership requirement for land-holding companies, so you don’t have to worry about the specific caps.
However, if you establish a REIT corporation in the Philippines, the company must be 60% Filipino-owned. You can establish a 100% foreign-owned REIT corporation in the Philippines but your portfolio must only have leasehold rights to your properties.
You can start with as little as PHP 5,000 to PHP 10,000 as an individual investor. The exact minimum depends on the share price and the PSE “Board Lot” rules. However, if you establish a REIT company, you need to have PHP 300 Million (approx. USD 5.4 Million) at the time of incorporation.
Dividends are credited directly and automatically into your brokerage account, typically net of the applicable withholding tax. Once the funds land in your account, you have two primary options:
- You can withdraw the cash to your linked bank account for personal use, or
- You can reinvest the proceeds by purchasing more shares of the same REIT.
Many investors choose the latter to take advantage of the power of compounding, effectively growing their “ownership” of the properties over time without injecting new capital.
Absolutely. Most premier Philippine online brokers have established robust digital KYC (Know Your Customer) processes that allow for remote account opening. While the process is rigorous (often requiring notarized or apostilled identification documents and a video call for verification) it is entirely manageable from abroad.
However, you need to facilitate international wire transfers to fund your account, and having a local Philippine bank account (which some brokers can help you set up) can significantly streamline the withdrawal of your dividends later on.
“Safety” is defined by your goals, but REITs offer superior risk mitigation through diversification and professional management. When you buy a condo, you are exposed to a single neighborhood, building, and tenant. If the tenant leaves, your income drops to zero.
With a REIT, your investment is spread across dozens of office towers, warehouses, and malls managed by professionals who handle the “leaky faucets” and contract negotiations. Furthermore, REITs provide immediate liquidity, whereas a condo can take months of marketing and legal paperwork to liquidate into cash.
